"The comfort of the rich depends on an abundance of the poor." ~ Voltaire
"If any man tells you he loves America, yet hates Labor, he is a liar." ~ Abraham Lincoln

Friday, January 31, 2014

Give Reality Back To Taxpayers

Lt. Gov. Rebecca Kleefisch took to the Journal Sentinel to boast about all Scott Walker has done for Wisconsin and to propose giving the budgetary "surplus" back to the taxpayers.

If you consider borrowing, increasing long-term debt, as a "surplus," then Scott Walker has really been on point. Yet, as most can see, this is merely kicking the can down the road. A bit of smoke and mirrors for Mr. Walker, so he can present the illusion of positive policy outcomes. But in reality, he's just burying Wisconsin is debt so he can advance his own political career.

To come up with her rosy picture, Kleefisch compares the Walker administration's tenure with the peak of the recession. One would expect improvement after hitting rock bottom. They could have taken office and done nothing and things would have shown some improvement. For a truer test, we need to see where we were at before the recession. To show real gains one would expect improvement above and beyond the norm, and improvements that rank near the best among states, especially if one is going to claim his or her policies are doing so much good.

Kleefisch crows about the improvement in the unemployment rate. "Four years ago, the state's unemployment rate was 9.2%. In fact, Wisconsin lost more than 133,000 jobs and lost 27,000 businesses during Democratic Gov. Jim Doyle's final term in office. After Gov. Walker and I were sworn in, we took aggressive action to get Wisconsin working again. Now, the unemployment rate is the lowest it has been in more than five years at 6.2%."

As you can see from the graph below, its awfully convenient to choose 2010 for comparison, rather than any other time before that. When we look back just a bit further, we see Wisconsin still has a way to go to reach full employment. Our current unemployment rate ranks us 22nd among the states. In 2011 and 2012, although we had higher unemployment rates (6.9 and 7.5), we ranked 19th among the states for both years. As far as the state is doing compared to others, we've actually gotten worse.

Kleefisch talks of turning a deficit into a surplus. "We also took necessary steps to get our fiscal house in order over the past few years. We inherited a $3.6 billion budget deficit when we took office and turned it into a $759 million surplus by the end of the 2011-'13 budget."

As Media Matters commented, "Fox News hyped Wisconsin Governor Scott Walker's economic record, claiming that the governor's economic plan generated a nearly $1 billion budget surplus while ignoring that the current surplus is built upon a projected structural deficit and that the state ranks 28th in the nation for job creation under Walker's tenure." From the same article, "The Legislative Fiscal Bureau: Under Walker's Budget, Wisconsin's Structural Deficit Would Grow To $725 Million. A non-partisan analysis of Walker's most recent budget concluded that the Governor's proposed tax cuts would increase the state's budget shortfall over the coming years. Walker's tax plan hyped by Fox would in fact cost the state $180 million and would ultimately turn the touted surplus into a deficit by 2017."

The Democratic Party of Wisconsin also notes, "When Scott Walker was running for governor, he promised to balance budgets Generally Accepted Accounting Principles (GAAP); however, the budget he claims as balanced is anything but when using GAAP. By gutting public education to the tune of $2.6 billion and slashing more than $500 million from public healthcare, along with skillfully kicking the can down the road with accounting tricks that pass debt onto future budgets, Walker has given the appearance of a balanced budget. But when using the GAAP that Walker promised to use, Wisconsin’s deficit will actually be more than $3 billion at the end of the biennium – a larger deficit than Walker inherited."

Kleefisch continues, "And some 100,000 jobs and nearly 13,000 new businesses have been created since we took office." Again, as we can see from the graph below, all this "job creation" has only gotten us back to 2004 levels. Oddly, I remember some politician promising 250,000 new jobs in his first term.

Republicans always talk about "putting money back into taxpayers pockets." Although Kleefisch didn't mention it in her op-ed, lets take a look at the real median household income in Wisconsin. Are those wonderful Walker policies fattening your wallet? As the graph below shows, the median household actually has less now than they did during the peak of the recession.